Mobile network operators can scale, but can they hyperscale?

Telecom.tv recently hosted a knowledge sharing discussion about the successful take up of APIs. Being a ‘highly digitized country’, Brazil was the focus market. 

The session is part of the GSMA’s efforts to develop the market for mobile network operator (MNO) APIs. Panelists included representatives from the leading MNOs - Claro, TIM, and Vivo - and Infobip, an IT and telecommunication service provider. Their experience shows how a new market developed, beyond the usual MNO scope of mobile connectivity offerings. 

Success involved an ecosystem approach to address emergent customer demand, technology fragmentation, and a shift in MNOs’ mindset to value market expansion over market-share rivalry. 

What changed in the market? 

There was an early market in Brazil for a SIM-swap API. However, each MNO implemented their
solution differently, due to technical specification ambiguities. The lack of nation-wide uniformity meant a lack of scale, an unappealing prospect for businesses with national operations. It also did not appeal to application developers who are integral to the service-delivery value chain. 

As individual MNOs entered into contracts with the banking sector, there was pressure for the mobile communications industry to catch up with new demand. Financial institutions and their customers want to experience uniform or standardized transactions for everyday banking activities. This led MNOs to substitute ‘network coverage’ for ‘API consumption’ as a value proposition. As a result, cross-MNO collaboration and standardization became a necessity. 

Standardization is not just about technology

The GSMA’s Open Gateway initiative provides the technical foundations for standardized APIs. For successful market adoption, however, the Brazilian panelists emphasized other, non-technical, factors.

For example, when API-enabled services are a nationwide proposition, consistency across MNOs matters. Beyond technical standardization (all API exposures are implemented in the same way), customer requirements extend to consistent contracts, and simple, standardized on-boarding procedures. When country MNOs collaborate, they can standardize these processes and agree on reporting metrics. This ensures that users benefit from stable and observable APIs that come packaged with service level agreements (SLAs).

Collaboration also helps to align MNO roadmaps to expand the API portfolio. This exposes demand for new application opportunities. In Brazil, for example, the banking sector began to combine ‘SIM-swap’ with ‘number verification’ APIs.

Regulation is another market driver. LGDP privacy requirements (Brazil’s equivalent of GDPR) require a common solution with a common legal underpinning across the country. This too requires MNO collaboration and standardization beyond technology considerations. 

Strategic Advice for Market Participants 

Prepare for sales channel differences. APIs appeal to different customer segments and require different sales channel approaches. Consumers as the ultimate customer are reached through enterprise users (financial institutions being an example) and developer communities. For some MNOs, these customers represent new segments with new needs. Infobip’s developer ecosystem was a factor in motivating Brazil’s MNOs to collaborate with it. The developer ecosystem took well over a decade to cultivate via Infobip’s SHIFT developer conference. Other channel partners are also essential for MNOs to gain a foothold in enterprise IT stacks.

There is a need to change developer perceptions about the mobile industry. – Application developers view MNOs as selling connectivity subscriptions and data packages. When discussing APIs, developers primarily think of APIs for cloud access. Network APIs are a completely different proposition. To alter perceptions, API solution providers need to frame the discussion around new use cases and value creation opportunities.

MNOs’ enterprise sales units work in a different context to the API demand ecosystem. The switch from connectivity to APIs requires a change in MNO mindset which is not straightforward given existing organizational, knowhow, and incentive structures. For some MNOs, panelists suggested that a simpler API route to market will pass through hyperscaler channels. 

The GSMA’s Open Gateway initiative put MNOs on a journey to a different way of working. This emphasizes trustworthy collaboration, standardization, and roadmap alignment to grow the market for all participants. This suggests a role for an external, coordinating agency that no individual MNO can accomplish credibly on its own. 

Wider-market Implications 

The IoT sector shares parallels with network API exposure initiatives to improve customer coverage, distribution channel, and operational support experiences. For example, Vodafone acquired Simetric to deliver a single pane experience to enterprise customers with different IoT holdings. AT&T announced a collaboration with Ericsson to streamline IoT procurement and operational processes, thereby adding consistency when selling and supporting IoT solutions across multiple customers and sellers. While Vodafone and AT&T provide connectivity for sizeable IoT device populations, this is not the case for smaller providers that focus on a country, an economic region, or an industry vertical. There are also signs that regulators and product vendors favor cross-vendor interoperability at connectivity, data, and semantic layers. The MNO sector has rallied around the GSMA’s eSIM initiative to improve connectivity and portability. These are examples where industry collaboration can create a common front and expand the market opportunity. 

Looking to the future, more accessible and native-AI capabilities will drive enterprise demand for uniform experiences around IoT data, digital twins, data sharing across organizational boundaries, and the supply of data with meaning. Market expansion requires MNOs collaboration, standardization, and the adoption of new business model constructs (sales channel development, partnering, developer engagement). Might there be another opportunity for a coordinating agency to work higher up the telco technology stack? After all, there is an IoT precedent lower down the technology stack in the 2010 cross-industry accord to standardize remote SIM provisioning for M2M modules.